Palmitoylation is the posttranslational addition of a fatty acid to protein through a thioester linkage. The reversibility of protein palmitoylation distinguishes it from the static lipid modifications isoprenylation and N-myristoylation and makes it an attractive mechanism for regulating protein localization and activity. Heterotrimeric G proteins and Ras are anchored to the inner leaflet of the plasma membrane by covalent lipid modification, including acylation with palmitate. Palmitate turnover on signal transducers regulates their trafficking between intracellular compartments and the plasma membrane, thereby influencing where and when signals are transmitted. The goal of this project is to understand how palmitoylation of signaling proteins is regulated. The breakthrough in this field was our discovery of a large family of protein acyltransferases or PATs. The signature feature of these proteins is a DHHC-cysteine rich domain that is required for PAT activity in vitro and in vivo. We have shown that different DHHC proteins are localized in different subcellular compartments in yeast and in mammalian cells. In yeast, we identified a vacuolar DHHC protein that modifies Vac8, a N-myristoylated protein required for vacuole fusion. In mammalian cells, we identified a human PAT (DHHC9- GCP16) localized in the Golgi that recognizes a different type of substrate - Ras, a C-terminally farnesylated protein. Our central hypothesis is that the biological specificity of protein palmitoylation is determined by: (1) the biochemical specificity of a PAT for certain structural or functional classes of substrates and (2) the localization of a specific PAT or unique set of PATs to a given subcellular compartment. In Aim 1, we will identify the determinants that allow a PAT to recognize a specific substrate and test whether a single PAT recognizes multiple classes of substrates using the yeast enzyme Pfa3 and its substrate Vac8, a model of a physiologically relevant enzyme and substrate pair. Aims 2-4 are focused on addressing how the DHHC proteins are integrated functionally and spatially into signal transduction pathways. In Aim 2, we propose to identify which DHHC proteins modify Ga in yeast and determine in which compartments they function. In Aim 3, we will determine how the human Ras PAT DHHC9- GCP16 regulates Ras localization and function in cells. In Aim 4, we will identify which DHHC proteins palmitoylate Ga in mammalian cells and determine how they affect Ga localization and trafficking. Completion of these aims will provide novel insights into a regulatory mechanism for signaling proteins that are central to the regulation of numerous physiological processes and whose function is perturbed in cancer, heart disease, and mental illness. These studies lay the groundwork for development of inhibitors of DHHC proteins, which may be useful in developing treatments for disease.